First quarter 2018 net income per diluted share
was $3.91Adjusted operating EPS was $3.70, up 37 percent
First quarter 2018 return on equity excluding
AOCI was 28.3 percentAdjusted operating ROE excluding AOCI was 29.3
percent, up 570 bps
Regular quarterly dividend raised 8 percent to
$0.90 per diluted share, representing the eleventh increase during
the past nine years
Ameriprise Financial, Inc. (NYSE: AMP) today reported first
quarter 2018 net income of $594 million, up 47 percent compared to
a year ago, or $3.91 per diluted share, up 55 percent. Adjusted
operating earnings were $563 million, up 30 percent compared to a
year ago, with adjusted operating earnings per diluted share of
$3.70, up 37 percent.
“Ameriprise delivered a strong first quarter and a good start to
the year,” said Jim Cracchiolo, chairman and chief executive
officer. “We are generating strong earnings across the firm,
and our momentum in Advice and Wealth Management continues with
double-digit revenue growth, increased client activity and one of
our strongest quarters of client net inflows. We’re serving
more clients in personal advice relationships and continue to
invest to deliver an exceptional client and advisor
experience.”
“As we grow, we continue to generate significant free cash flow
that we invest in the firm and return to shareholders through
dividends and share repurchases. During the quarter, we
increased our repurchases opportunistically, while also increasing
our excess capital. And today, we announced another increase
in our regular quarterly dividend – the eleventh increase over the
past nine years.”
GAAP Results – First quarterNet
revenues of $3.2 billion increased 8 percent, or $242 million, from
a year ago primarily due to strong net revenue growth in Advice
& Wealth Management from growth in client assets.
Expenses of $2.5 billion increased 1 percent compared to a year
ago.
Adjusted Operating Results – First
quarterAdjusted operating net revenues increased 9 percent
to $3.1 billion after normalizing for the net impacts of 12b-1
fees. Advice & Wealth Management net revenues increased 16
percent driven by growth in client assets after normalizing for the
net impacts of 12b-1 fees.
Adjusted operating expenses of $2.5 billion increased 4 percent.
General and administrative expense increased 1 percent reflecting
ongoing expense discipline.
Ameriprise Financial, Inc. First Quarter
Summary
(in millions, except per share amounts, unaudited)
Quarter EndedMarch 31,
Per Diluted ShareQuarter
EndedMarch 31,
2018 2017
% Better/(Worse)
2018 2017
% Better/(Worse)
GAAP net income (3) $ 594 $ 403 47 % $ 3.91 $ 2.52 55 %
Adjustments, net of tax (see reconciliation on p. 13) (31 )
29 (0.21 ) 0.18
Adjusted operating earnings (1) (2)
(see reconciliation on p. 13) $ 563 $ 432 30 % $ 3.70
$ 2.70 37 % Weighted average common shares outstanding: Basic 149.5
157.5 Diluted 152.1 160.1
(1) The company believes the presentation
of adjusted operating earnings best represents the economics of the
business. Adjusted operating earnings, after-tax, exclude the
consolidation of certain investment entities; net realized
investment gains or losses, net of deferred sales inducement costs
(“DSIC”) and deferred acquisition costs (“DAC”) amortization,
unearned revenue amortization and the reinsurance accrual;
integration and restructuring charges; the market impact on
variable annuity guaranteed benefits, net of hedges and related
DSIC and DAC amortization; the market impact on indexed universal
life benefits, net of hedges and related DAC amortization, unearned
revenue amortization, and the reinsurance accrual; the market
impact on fixed index annuity benefits, net of hedges and the
related DAC amortization; the market impact of hedges to offset
interest rate changes on unrealized gains or losses for certain
investments; and income or loss from discontinued operations.
(2) Effective January 1, 2018, the company
changed the naming convention for its non-GAAP financial measures
from “operating” to “adjusted operating” to more clearly
differentiate between GAAP and non-GAAP financial measures. The
definition of these measures remains unchanged.
(3) In the first quarter, Ameriprise
adopted the new accounting standard, Revenue from Contracts with
Customers, on a retrospective basis.
Taxes
The adjusted operating effective tax rate in the quarter was
14.3 percent compared to 16.9 percent a year ago. The lower
effective tax rate reflects the reduction in the federal income tax
rate and a reduction in the benefit from stock compensation
accounting. The company estimates that its full year 2018 adjusted
operating effective tax rate will be in the 17 to 19 percent
range.
First Quarter 2018 Highlights
Ameriprise delivered strong financial results, increased
excess capital, returned $512 million to shareholders and raised
its quarterly dividend
- First quarter profitability was strong,
with a 30 percent increase in adjusted operating earnings and a
29.3 percent adjusted operating ROE excluding AOCI, up 570 basis
points compared to the prior year.
- Ameriprise returned over 90 percent of
adjusted operating earnings to shareholders, reflecting strong
balance sheet fundamentals, excellent risk management discipline
and substantial free cash flow generation. The company repurchased
2.4 million shares of common stock for $387 million and paid $125
million in quarterly dividends.
- Excess capital increased to $1.4
billion, the RBC ratio increased to over 500 percent and a total of
$484 million in dividends were paid from subsidiaries to the
holding company during the quarter.
- Today the company announced that it was
increasing its regular quarterly dividend from $0.83 per diluted
share to $0.90 per diluted share – an 8 percent increase. This is
the eleventh increase over the past nine years.
The firm’s comprehensive and personal client focus, combined
with its broad solution set, resulted in strong asset growth and
retention
- Total assets under management and
administration increased 9 percent to $887 billion, reflecting
ongoing strength in Ameriprise advisor client net inflows.
- Ameriprise retail client assets grew 12
percent to $557 billion.
- Client demand for fee-based investment
advisory (wrap) products remains strong with net inflows of $5.7
billion in the quarter. Wrap assets reached $251 billion, one of
the largest platforms in the industry.
- Advisor productivity increased a strong
13 percent to $586,000 per advisor on a trailing 12-month basis
after normalizing for the net impact from eliminating 12b-1 fees in
advisory accounts.
- Columbia Threadneedle investment
performance in retail and institutional equity, fixed income and
multi-asset portfolios and strategies remains strong. At quarter
end, the company had 109 four- and five-star Morningstar-rated
funds.
- Within its multi-asset solution set,
gross sales of the Columbia Adaptive Risk Allocation Fund and the
Threadneedle Dynamic Real Return Fund increased to over $600
million in the quarter.
- Variable annuity cash sales increased
20 percent, with 30 percent of sales in products without living
benefit guarantees. Indexed Universal Life sales increased 9
percent.
Ameriprise continued to invest to drive productivity,
business growth and client satisfaction
- The company is making multi-year
investments to enhance its client experience with new digital
capabilities. In the quarter, the company introduced a new
interactive asset allocation tool for clients and advisors and
enhanced its interactive platforms.
- Columbia Threadneedle completed a
significant portion of the integration of its front-, middle-, and
back-office operations as planned that will provide greater
efficiencies and flexibility to support business growth.
- Ameriprise continues to invest in
expanding its distribution network by adding experienced advisors
with strong productivity. Seventy-nine experienced advisors joined
the firm during the quarter.
- Columbia Threadneedle continued to
leverage its breadth of investment capabilities globally to serve
clients’ investment needs, including launching several new
products:
- Six new separately managed account
strategies for high-net-worth municipal bond investors in the
U.S.
- A new, global absolute return credit
strategy – the Threadneedle (Lux) Global Investment Grade Credit
Opportunities Fund
- The Columbia Overseas Core Fund that
provides retail investors with access to a successful investment
strategy that has been offered institutionally for more than a
decade
- Consistent with our long-term strategy
to grow our European presence, serve more clients and increase
profitable flows, the company is executing plans to expand its
distribution in key European markets to complement its strength in
the U.K.
Values-based, client-focused firm
- Ameriprise earned the Hearts &
Wallets Top Performer™ designation for: understands me and shares
my values; explains things in understandable terms; has defined,
repeatable processes for producing results; and investment ideas
that are knowledgeable, timely and tactical.
- Ameriprise advisors were recognized in
multiple top advisor rankings, including 59 advisors named to
Barron’s annual Top 1,200 State-by-State Advisors list, 125
advisors named to Forbes’ inaugural Best-in-State Wealth Advisors
ranking and 39 advisors named to the Financial Times Top 400
Advisers list.
Ameriprise Financial, Inc. Advice & Wealth
Management Segment Adjusted Operating Results (in
millions, unaudited)
Quarter Ended March 31,
% Better/(Worse)
2018 2017
Advice & Wealth Management
(1)
Net revenues $ 1,501 $ 1,321 14 % Expenses 1,185
1,073 (10 )% Pretax adjusted operating earnings $ 316
$ 248 27 % Pretax adjusted operating margin
21.1 % 18.8 %
Quarter Ended March 31,
% Better/(Worse)
2018 2017 Retail client assets (billions) $ 557 $ 499
12 % Wrap net flows (billions) $ 5.7 $ 3.9 44 % Brokerage cash
balance (billions) $ 25.4 $ 26.2 (3 )% Adjusted operating net
revenue per advisor normalizing for the net impact of 12b-1 fee
changes (trailing 12 months - thousands) $ 586 $ 518 13 %
(1) In the first quarter, Ameriprise
adopted the new accounting standard, Revenue from Contracts with
Customers, on a retrospective basis. The adoption resulted in
changes to certain advisor revenues that are now recognized on a
gross rather than a net basis.
Advice & Wealth Management pretax adjusted operating
earnings increased 27 percent to $316 million driven by asset
growth and higher earnings on cash balances. Pretax adjusted
operating margin was a strong 21.1 percent, up 230 basis points
from a year ago. Pretax adjusted operating margin in both periods
reflects the adoption of a new accounting standard, which decreased
margin by approximately 40 basis points in each period.(1)
First quarter earnings tend to be seasonally lower than other
quarters because the first quarter has two fewer fee days and
includes higher payroll tax expenses. These items reduced earnings
by $12 million and $7 million respectively in the quarter.
Adjusted operating net revenues increased 16 percent to $1.5
billion after normalizing for the 12b-1 fee net impacts, reflecting
strong client activity, higher earnings on cash balances and market
appreciation.
Adjusted operating expenses increased 10 percent to $1.2 billion
primarily from higher distribution expenses related to growth in
client assets. General and administrative expenses were up 6
percent compared to a year ago, reflecting the addition of IPI and
investments for business growth, including additional advertising
as well as higher volume-related expenses.
Total retail client assets increased to $557 billion driven by
client net inflows, client acquisition and market appreciation.
Wrap net inflows were $5.7 billion and total wrap assets increased
18 percent to $251 billion. Client brokerage cash balances were
$25.4 billion, down slightly from a year ago as clients allocated
cash to other investments.
Adjusted operating net revenue per advisor on a trailing
12-month basis increased 13 percent to $586,000 after normalizing
for the net impact from eliminating 12b-1 fees in advisory
accounts. Total advisors increased to 9,881, with 79 experienced
advisors moving their practices to Ameriprise in the quarter and
continued good advisor retention.
Ameriprise Financial, Inc. Asset Management
Segment Adjusted Operating Results (in millions,
unaudited)
Quarter Ended March 31,
% Better/(Worse)
2018 2017 Asset Management Net
revenues $ 778 $ 725 7 % Expenses 583 575
(1 )% Pretax adjusted operating earnings $ 195 $ 150
30 % Pretax adjusted operating margin 25.1 % 20.7 %
Net pretax adjusted operating margin (1) 40.2 % 35.1 %
Item included in adjusted operating
earnings:
Net benefit from EMEA initiatives $ 9 $ — NM
Quarter
Ended March 31,
% Better/(Worse)
2018 2017 Total segment AUM (billions) $ 485 $ 467 4
%
Net Flows
(billions)
Former parent company related net new flows $ (1.6 ) $ (2.6 ) 40 %
Global Retail net flows, excl. former parent flows (3.5 ) (3.0 )
(19 )% Global Institutional net flows, excl. former parent flows
(2.6 ) — NM Total segment net flows $ (7.7 ) $
(5.6 ) (36 )%
(1) See reconciliation on page 16
NM Not Meaningful — variance equal to or greater than 100%
Asset Management pretax adjusted operating earnings
increased 30 percent to $195 million, reflecting market
appreciation and expense discipline, partially offset by the
cumulative impact of net outflows. Earnings in the quarter also
included a net benefit of $9 million related to a credit from a
vendor, which more than offset incremental regulatory-related
expenses. First quarter net pretax adjusted operating margin grew
to 40.2 percent from 35.1 percent a year ago.
Adjusted operating net revenues grew 7 percent to $778 million
driven by asset growth from market appreciation, the Lionstone
acquisition and a vendor credit, partially offset by the cumulative
impact of net outflows. AUM increased 4 percent to $485
billion.
Adjusted operating expenses of $583 million increased 1 percent
reflecting lower distribution-related expenses and well managed
general and administrative expenses. General and administrative
expense increased 5 percent and included the Lionstone acquisition,
higher research costs related to MiFID II, foreign exchange
translation and investments in growth initiatives.
In the quarter, outflows were elevated primarily from
redemptions from institutional clients that were driven by shifts
in asset allocation decisions away from equity and high yield
products, as well as from an institutional client seeking
liquidity. Underlying U.S. retail flows improved, with increased
gross sales at top intermediary partner firms. In EMEA, market
volatility drove an uptick in retail redemptions during the
quarter.
Ameriprise Financial, Inc. Annuities Segment
Adjusted Operating Results (in millions, unaudited)
Quarter Ended March 31,
% Better/(Worse)
2018 2017 Annuities Net revenues
$ 613 $ 608 1 % Expenses 481 469 (3 )%
Pretax adjusted operating earnings $ 132 $ 139 (5 )%
Variable annuity pretax adjusted operating earnings $ 116 $
116 — % Fixed annuity pretax adjusted operating earnings 16
23 (30 )% Total pretax adjusted operating
earnings $ 132 $ 139 (5 )% Item included in
adjusted operating earnings: Market impact on DAC and DSIC (mean
reversion) $ — $ 10 NM
Quarter Ended March 31,
% Better/(Worse)
2018 2017 Variable annuity ending account balances
(billions) $ 78.7 $ 76.4 3 % Variable annuity net flows (billions)
$ (0.9 ) $ (1.1 ) 14 % Fixed deferred annuity ending account
balances (billions) $ 9.1 $ 9.8 (7 )% Fixed deferred annuity net
flows (billions) $ (0.2 ) $ (0.3 ) 9 % NM Not Meaningful —
variance equal to or greater than 100%
Annuities pretax adjusted operating earnings were $132
million compared to $139 million a year ago.
Variable annuity earnings were $116 million in both periods.
Variable annuity account balances increased 3 percent to $79
billion from market appreciation, partially offset by net outflows.
Variable annuity cash sales increased 20 percent – 30 percent of
sales did not have living benefit features. Variable annuity net
amount at risk as a percent of account values was 0.4 percent for
living benefits and 0.2 percent for death benefits.
Fixed annuity adjusted operating earnings decreased to $16
million reflecting continued spread compression from the extended
period of low interest rates and lower account balances. Account
balances declined 7 percent from limited new product sales and
continued lapses.
Ameriprise Financial, Inc. Protection Segment
Adjusted Operating Results (in millions, unaudited)
Quarter Ended March 31,
% Better/(Worse)
2018 2017 Protection Net revenues $ 519
$ 521 — % Expenses 449 458 2 % Pretax adjusted
operating earnings $ 70 $ 63 11 % Life and Health insurance:
Net revenues $ 253 $ 262 (3 )% Expenses 188 194 3 %
Pretax adjusted operating earnings $ 65 $ 68 (4 )% Auto and
Home: Net revenues $ 266 $ 259 3 % Expenses 261 264 1
% Pretax adjusted operating earnings/(loss) $ 5 $ (5 ) NM
Items included in adjusted operating earnings: Market impact on DAC
(mean reversion) $
— $ 1 NM Auto and Home catastrophe losses
(14 ) (25 ) 44 % Total protection impact $ (14 ) $
(24 ) 42 %
Quarter Ended March 31,
% Better/(Worse)
2018 2017 Life insurance in force (billions) $ 196 $
196
— VUL/UL ending account balances (billions) $ 12.5 $
11.8 6 % Auto and Home policies in force (thousands) 934 940 (1 )%
NM Not Meaningful — variance equal to or greater than 100%
Protection pretax adjusted operating earnings were $70
million compared to $63 million a year ago.
Life and Health insurance earnings decreased to $65 million from
$68 million a year ago reflecting the low interest rate
environment. Overall mortality experience was at the higher end of
expected ranges. VUL/UL cash sales were $71 million, up 9
percent.
Auto & Home pretax adjusted operating earnings of $5 million
included net catastrophe losses of $14 million, primarily related
to unusually severe winter storms in the Northeast. Adjusted
operating earnings excluding net catastrophe losses reflect the
benefit of continued rate increases, enhanced underwriting and
claims management.
Ameriprise Financial, Inc. Corporate & Other
Segment Adjusted Operating Results (in millions,
unaudited)
Quarter Ended March 31,
% Better/(Worse)
2018 2017 Corporate & Other,
Excluding Long Term Care Pretax adjusted operating loss $ (58 )
$ (81 ) 28 %
Long Term Care Pretax adjusted operating
earnings $ 2 $ 1 NM Items included in adjusted operating
earnings: DOL planning and implementation expenses $ (3 ) $ (10 )
70 % Renegotiated vendor arrangement — (9 ) NM
Total corporate & other impact $ (3 ) $ (19 ) 84 % NM
Not Meaningful — variance equal to or greater than 100%
Corporate & Other pretax adjusted operating loss
excluding long term care was $58 million compared to an $81 million
loss a year ago. Corporate expenses in the first quarter reflect a
decline in DOL-related expenses and lower project-related costs
where spending is anticipated to increase from these new
initiatives. The prior year period also included the unfavorable
impact from the renegotiation of a vendor arrangement.
Long Term Care pretax adjusted operating earnings were $2
million in the quarter and reflected the favorable impact of normal
fluctuations in mortality-related terminations, which reduced the
active life and claims reserves in the quarter. The company
continues to diligently manage this closed block of business with a
consistent strategy for premium increases, application of extensive
credible actuarial experience to determine reserves and significant
protections related to the portion of the block that is reinsured
to a third-party.
At Ameriprise Financial, we have been helping people feel
confident about their financial future for more than 120 years.
With a nationwide network of 10,000 financial advisors and
extensive asset management, advisory and insurance capabilities, we
have the strength and expertise to serve the full range of
individual and institutional investors’ financial needs. For more
information, visit ameriprise.com.
Ameriprise Financial Services, Inc. offers financial planning
services, investments, insurance and annuity products. Columbia
Funds are distributed by Columbia Management Investment
Distributors, Inc., member FINRA and managed by Columbia Management
Investment Advisers, LLC. Threadneedle International Limited is an
SEC- and FCA-registered investment adviser affiliate of Columbia
Management Investment Advisers, LLC based in the U.K. Auto and home
insurance is underwritten by IDS Property Casualty Insurance
Company, or in certain states, Ameriprise Insurance Company, both
in De Pere, WI. RiverSource insurance and annuity products are
issued by RiverSource Life Insurance Company, and in New York only
by RiverSource Life Insurance Co. of New York, Albany, New York.
Only RiverSource Life Insurance Co. of New York is authorized to
sell insurance and annuity products in the state of New York. These
companies are all part of Ameriprise Financial, Inc. CA License
#0684538. RiverSource Distributors, Inc. (Distributor), Member
FINRA.
Forward-Looking Statements
This news release contains forward-looking statements that
reflect management’s plans, estimates and beliefs. Actual results
could differ materially from those described in these
forward-looking statements. Examples of such forward-looking
statements include:
- the statement that the company expects
its full year 2018 adjusted operating effective tax rate to be in
the 17 to 19 percent range;
- statements about our strategy to grow
our European presence and execute plans to expand distribution in
key European markets;
- statements about anticipated spending
increases related to net initiatives;
- statements of the company’s plans,
intentions, positioning, expectations, objectives or goals,
including those relating to asset flows, mass affluent and affluent
client acquisition strategy, client retention and growth of our
client base, financial advisor productivity, retention, recruiting
and enrollments, the introduction, cessation, terms or pricing of
new or existing products and services, acquisition integration,
general and administrative costs, consolidated tax rate, return of
capital to shareholders, and excess capital position and financial
flexibility to capture additional growth opportunities;
- other statements about future economic
performance, the performance of equity markets and interest rate
variations and the economic performance of the United States and of
global markets; and
- statements of assumptions underlying
such statements.
The words “believe,” “expect,” “anticipate,” “optimistic,”
“intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,”
“likely,” “forecast,” “on pace,” “project” and similar expressions
are intended to identify forward-looking statements but are not the
exclusive means of identifying such statements. Forward-looking
statements are subject to risks and uncertainties, which could
cause actual results to differ materially from such statements.
Such factors include, but are not limited to:
- conditions in the interest rate, credit
default, equity market and foreign exchange environments, including
changes in valuations, liquidity and volatility;
- changes in and the adoption of relevant
accounting standards and securities rating agency standards and
processes, as well as changes in the litigation and regulatory
environment, including ongoing legal proceedings and regulatory
actions, the frequency and extent of legal claims threatened or
initiated by clients, other persons and regulators, and
developments in regulation and legislation, including the rules,
exemptions and regulations implemented or that may be implemented
or modified in connection with the Dodd-Frank Wall Street Reform
and Consumer Protection Act or in light of the U.S. Department of
Labor rule and exemptions pertaining to the fiduciary status of
investment advice providers to 401(k) plan, plan sponsors, plan
participants and the holders of individual retirement or health
savings accounts (as well as similar SEC, Certified Financial
Planner Board and state fiduciary rules and standards);
- investment management performance and
distribution partner and consumer acceptance of the company’s
products;
- effects of competition in the financial
services industry, including pricing pressure, the introduction of
new products and services and changes in product distribution mix
and distribution channels;
- changes to the company’s reputation
that may arise from employee or advisor misconduct, legal or
regulatory actions, cybersecurity incidents, perceptions of the
financial services industry generally, improper management of
conflicts of interest or otherwise;
- the company’s capital structure,
including indebtedness, limitations on subsidiaries to pay
dividends, and the extent, manner, terms and timing of any share or
debt repurchases management may effect as well as the opinions of
rating agencies and other analysts and the reactions of market
participants or the company’s regulators, advisors, distribution
partners or customers in response to any change or prospect of
change in any such opinion;
- changes to the availability and cost of
liquidity and the Company’s credit capacity that may arise due to
shifts in market conditions, the company’s credit ratings and the
overall availability of credit;
- risks of default, capacity constraint
or repricing by issuers or guarantors of investments the company
owns or by counterparties to hedge, derivative, insurance or
reinsurance arrangements or by manufacturers of products the
company distributes, experience deviations from the company’s
assumptions regarding such risks, the evaluations or the prospect
of changes in evaluations of any such third parties published by
rating agencies or other analysts, and the reactions of other
market participants or the company’s regulators, advisors,
distribution partners or customers in response to any such
evaluation or prospect of changes in evaluation;
- experience deviations from the
company’s assumptions regarding morbidity, mortality and
persistency in certain annuity and insurance products, or from
assumptions regarding market returns assumed in valuing or
unlocking DAC and DSIC or market volatility underlying our
valuation and hedging of guaranteed living benefit annuity riders,
or from assumptions regarding interest rates assumed in our loss
recognition testing of our Long Term Care business, or from
assumptions regarding anticipated claims and losses relating to our
automobile and home insurance products;
- changes in capital requirements that
may be indicated, required or advised by regulators or rating
agencies;
- the impacts of the company’s efforts to
improve distribution economics and to grow third party distribution
of its products;
- the ability to pursue and complete
strategic transactions and initiatives, including acquisitions,
divestitures, restructurings, joint ventures and the development of
new products and services
- the ability to realize the financial,
operating and business fundamental benefits of strategic
transactions and initiatives the company has completed, is pursuing
or may pursue in the future, which may be impacted by the ability
to obtain regulatory approvals, the ability to effectively manage
related expenses and by market, business partner and consumer
reactions to such strategic transactions and initiatives;
- the ability and timing to realize
savings and other benefits from re-engineering and tax
planning;
- interruptions or other failures in our
communications, technology and other operating systems, including
errors or failures caused by third party service providers,
interference or failures caused by third party attacks on our
systems (or other cybersecurity incidents), or the failure to
safeguard the privacy or confidentiality of sensitive information
and data on such systems; and
- general economic and political factors,
including consumer confidence in the economy and the financial
industry, the ability and inclination of consumers generally to
invest as well as their ability and inclination to invest in
financial instruments and products other than cash and cash
equivalents, the costs of products and services the company
consumes in the conduct of its business, and applicable legislation
and regulation and changes therein (such as the ongoing
negotiations following the June 2016 U.K. referendum on membership
in the European Union and the uncertain regulatory environment in
the U.S. after the 2016 presidential election), including tax laws,
tax treaties, fiscal and central government treasury policy, and
policies regarding the financial services industry and publicly
held firms, and regulatory rulings and pronouncements.
Management cautions the reader that the foregoing list of
factors is not exhaustive. There may also be other risks that
management is unable to predict at this time that may cause actual
results to differ materially from those in forward-looking
statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
on which they are made. Management undertakes no obligation to
update publicly or revise any forward-looking statements. The
foregoing list of factors should be read in conjunction with the
“Risk Factors” discussion under Part 1, Item 1A of and elsewhere in
our Annual Report on Form 10-K for the year ended December 31, 2017
available at ir.ameriprise.com.
The financial results discussed in this news release represent
past performance only, which may not be used to predict or project
future results. The financial results and values presented in this
news release and the below-referenced Statistical Supplement are
based upon asset valuations that represent estimates as of the date
of this news release and may be revised in the company’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2018. For
information about Ameriprise Financial entities, please refer to
the First Quarter 2018 Statistical Supplement available at
ir.ameriprise.com and the tables that follow in this news
release.
Ameriprise Financial announces financial and other information
to investors through the company’s investor relations website at
ir.ameriprise.com, as well as SEC filings, press releases, public
conference calls and webcasts. Investors and others interested in
the company are encouraged to visit the investor relations website
from time to time, as information is updated and new information is
posted. The website also allows users to sign up for automatic
notifications in the event new materials are posted. The
information found on the website is not incorporated by reference
into this release or in any other report or document the company
furnishes or files with the SEC.
The Wants & Pricing Report (February 2018) from the Hearts
& Wallets IQ DatabaseTM. Hearts & Wallets conducts an
annual syndicated survey in which respondents are asked to rate
their financial services providers in a variety of areas on a scale
of 1 (not at all satisfied) to 10 (extremely satisfied). In 2017,
5,282 respondents provided 8,282 sets of ratings. The report
designates Hearts & Wallets Top Performer™ in areas where
customer ratings for one or more provider are “distinctively higher
than customer ratings of other providers.” In areas where no
provider ratings are distinctively higher, no Top Performers are
designated. Ameriprise was rated as a Top Performer for customer
responses to the statements provided in this press
release. This rating is not indicative of future performance
and may not be representative of any one client’s experience, as
the rating is an average of a sample of client experiences.
Ameriprise paid a fee to Hearts & Wallets to cite the results
of the survey.
Reconciliation Tables
Ameriprise Financial, Inc. Reconciliation Table:
Earnings
Quarter EndedMarch 31,
Per Diluted ShareQuarter
EndedMarch 31,
(in millions, except per share amounts, unaudited)
2018
2017 2018 2017 Net
income $ 594 $ 403 $ 3.91 $ 2.52 Less: Net income (loss)
attributable to consolidated investment entities — 1 — 0.01 Add:
Integration/restructuring charges (1) 3 — 0.02 —
Add: Market impact on variable annuity
guaranteed benefits (1)
5 63 0.03 0.40 Add: Market impact on indexed universal life
benefits (1) (25 ) — (0.16 ) — Add: Market impact of hedges on
investments (1) (16 ) (1 ) (0.11 ) (0.01 ) Add: Net realized
investment (gains) losses (1) (6 ) (16 ) (0.04 ) (0.10 ) Add: Tax
effect of adjustments (2) 8 (16 ) 0.05
(0.10 ) Adjusted operating earnings $ 563 $
432 $ 3.70 $ 2.70 Weighted average common
shares outstanding: Basic 149.5 157.5 Diluted 152.1 160.1
(1) Pretax adjusted operating
adjustment.
(2) Calculated using the statutory tax
rate of 21% in 2018 and 35% in 2017.
Ameriprise Financial, Inc. Reconciliation
Table: Total Net Revenues Quarter
Ended
March 31,
(in millions, unaudited)
2018 2017
Total net revenues $ 3,168 $ 2,926 Less: CIEs revenue 22 22 Less:
Net realized investment gains (losses) 6 17 Less: Market impact on
indexed universal life benefits 13 1 Less: Market impact of hedges
on investments 16 1 Adjusted operating total net
revenues 3,111 2,885 Less: Net impacts of transitioning advisory
accounts to share classes without 12b-1 fees 7 30
Adjusted operating total net revenues excluding 12b-1 impact $
3,104 $ 2,855
Ameriprise Financial, Inc.
Reconciliation Table: Total Expenses
Quarter Ended
March 31,
(in millions, unaudited)
2018 2017 Total
expenses $ 2,472 $ 2,451 Less: CIEs expenses 22 21 Less:
Integration/restructuring charges 3 — Less: Market impact on
variable annuity guaranteed benefits 5 63 Less: Market impact on
indexed universal life benefits (12 ) 1 Less: DAC/DSIC offset to
net realized investment gains (losses) — 1 Adjusted
operating expenses $ 2,454 $ 2,365
Ameriprise
Financial, Inc. Reconciliation Table: Pretax Adjusted
Operating Earnings Quarter Ended
March 31,
(in millions, unaudited)
2018 2017
Adjusted operating total net revenues $ 3,111 $ 2,885 Adjusted
operating expenses 2,454 2,365 Pretax adjusted
operating earnings $ 657 $ 520
Ameriprise
Financial, Inc. Reconciliation Table: General and
Administrative Expense Quarter
Ended
March 31,
(in millions, unaudited)
2018 2017
General and administrative expense $ 789 $ 777 Less: CIEs expenses
1 — Less: Integration/restructuring charges 3 —
Adjusted operating general and administrative expense $ 785 $ 777
Ameriprise Financial, Inc. Reconciliation
Table: Effective Tax Rate Quarter Ended
March 31, 2018 (in millions, unaudited)
GAAP
AdjustedOperating
Pretax income $ 696 $ 657 Income tax provision $ 102 $ 94 Effective
tax rate 14.7 % 14.3 %
Ameriprise Financial,
Inc. Reconciliation Table: Effective Tax Rate
Quarter Ended March 31, 2017 (in millions,
unaudited)
GAAP
AdjustedOperating
Pretax income $ 475 $ 520 Income tax provision $ 72 $ 88 Effective
tax rate 15.2 % 16.9 %
Ameriprise Financial,
Inc. Reconciliation Table: Advice & Wealth Management
Adjusted Operating Net Revenues Quarter
Ended March 31, (in millions, unaudited)
2018
2017 Adjusted operating net revenues $ 1,501 $ 1,321
Less: Net impact of transitioning advisory accounts to share
classes without 12b-1 fees 7 30 Adjusted operating
total net revenues normalized for 12b-1 impact $ 1,494 $ 1,291
Ameriprise Financial, Inc. Reconciliation
Table: Advice & Wealth Management Adjusted Operating Net
Revenues (trailing 12 months) Quarter
Ended March 31, (in millions, unaudited)
2018
2017 Adjusted operating net revenues $ 5,796 $ 5,241
Less: Net impact of transitioning advisory accounts to share
classes without 12b-1 fees 37 219 Adjusted operating
total net revenues normalized for 12b-1 impact $ 5,759 $ 5,022
Ameriprise Financial, Inc. Reconciliation
Table: Asset Management Adjusted Operating Net Revenues
Quarter Ended March 31, (in millions,
unaudited)
2018 2017 Adjusted operating
net revenues $ 778 $ 725 Less: Net impact of transitioning advisory
accounts to share classes without 12b-1 fees — 11
Adjusted operating total net revenues excluding 12b-1 impact $ 778
$ 714
Ameriprise Financial, Inc.
Reconciliation Table: Asset Management Net Pretax Adjusted
Operating Margin Quarter Ended March 31,
(in millions, unaudited)
2018 2017 Adjusted operating
total net revenues $ 778 $ 725 Less: Distribution pass through
revenues 201 206 Less: Subadvisory and other pass through revenues
85 92 Net adjusted operating revenues $
492 $ 427 Pretax adjusted operating earnings $
195 $ 150 Less: Adjusted operating net investment income 2 4 Add:
Amortization of intangibles 5 4 Net
adjusted operating earnings $ 198 $ 150 Pretax
adjusted operating margin 25.1 % 20.7 % Net pretax adjusted
operating margin 40.2 % 35.1 %
Ameriprise
Financial, Inc. Reconciliation Table: Return on Equity (ROE)
Excluding Accumulated Other Comprehensive Income “AOCI”
Twelve Months Ended March 31,
(in millions, unaudited)
2018 2017 Net income
$
1,671 $ 1,352
Less: Adjustments (1)
(63 ) (128 ) Adjusted operating earnings
$
1,734
$
1,480 Total Ameriprise Financial, Inc. shareholders’
equity $ 6,122 $ 6,681 Less: Accumulated other comprehensive
income, net of tax 210 418 Total
Ameriprise Financial, Inc. shareholders’ equity excluding AOCI
5,912 6,263 Less: Equity impacts attributable to the consolidated
investment entities 1 1 Adjusted
operating equity $ 5,911 $ 6,262 Return on
equity excluding AOCI 28.3 % 21.6 %
Adjusted operating return on equity
excluding AOCI (2)
29.3 % 23.6 %
(1) Adjustments reflect the trailing
twelve months’ sum of after-tax net realized investment
gains/losses, net of deferred sales inducement costs (“DSIC”) and
deferred acquisition costs (“DAC”) amortization, unearned revenue
amortization and the reinsurance accrual; market impact on variable
annuity guaranteed benefits, net of hedges and related DSIC and DAC
amortization; the market impact on indexed universal life benefits,
net of hedges and related DAC amortization, unearned revenue
amortization, and the reinsurance accrual; the market impact on
fixed index annuity benefits, net of hedges and the related DAC
amortization; the market impact of hedges to offset interest rate
changes on unrealized gains or losses for certain investments;
integration/restructuring charges; and the impact of consolidating
certain investment entities. After-tax is calculated using the
statutory tax rate of 21% in 2018 and 35% in 2017.
(2) Adjusted operating return on equity
excluding accumulated other comprehensive income (AOCI) is
calculated using the trailing twelve months of earnings excluding
the after-tax net realized investment gains/losses, net of deferred
sales inducement costs (“DSIC”) and deferred acquisition costs
(“DAC”) amortization, unearned revenue amortization and the
reinsurance accrual; market impact on variable annuity guaranteed
benefits, net of hedges and related DSIC and DAC amortization; the
market impact on indexed universal life benefits, net of hedges and
related DAC amortization, unearned revenue amortization, and the
reinsurance accrual; the market impact on fixed index annuity
benefits, net of hedges and the related DAC amortization; the
market impact of hedges to offset interest rate changes on
unrealized gains or losses for certain investments;
integration/restructuring charges; the impact of consolidating
certain investment entities; and discontinued operations in the
numerator, and Ameriprise Financial shareholders’ equity excluding
AOCI and the impact of consolidating investment entities using a
five-point average of quarter-end equity in the denominator.
After-tax is calculated using the statutory tax rate of 21% in 2018
and 35% in 2017.
Ameriprise Financial, Inc. Consolidated
GAAP Results (in millions, unaudited)
Quarter Ended March 31,
% Better/(Worse)
2018 2017 Revenues Management
and financial advice fees $ 1,669 $ 1,487 12 % Distribution fees
468 441 6 Net investment income 396 391 1 Premiums 343 339 1 Other
revenues 308 278 11 Total revenues 3,184 2,936 8
Banking and deposit interest expense 16 10 (60 )
Total net revenues 3,168 2,926 8
Expenses
Distribution expenses 905 823 (10 ) Interest credited to fixed
accounts 141 162 13 Benefits, claims, losses and settlement
expenses 494 567 13 Amortization of deferred acquisition costs 92
72 (28 ) Interest and debt expense 51 50 (2 ) General and
administrative expense 789 777 (2 )
Total
expenses 2,472 2,451 (1 ) Pretax income 696 475 47 Income tax
provision 102 72 (42 )
Net income $ 594
$ 403 47 %
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version on businesswire.com: https://www.businesswire.com/news/home/20180423006410/en/
Ameriprise Financial, Inc.Investor Relations:Alicia A.
Charity, 612-671-2080alicia.a.charity@ampf.comorStephanie Rabe,
612-671-4085stephanie.m.rabe@ampf.comorMedia Relations:Paul W.
Johnson, 612-671-0625paul.w.johnson@ampf.com
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